Cumulus Citadel Purchase Creates Challenge for Clear Channel

Image via WikipediaThe Wall St. Journal is reporting today that the nation's second largest radio station owner, Cumulus Media, Inc.(CMI), has acquired Citadel Broadcasting Corp., third-largest U.S. radio broadcaster, for a combined $2.5 billion in cash and stocks.

Citadel shareholders will receive either $37 cash per share or 8.525 common stock shares of CMI. Citadel emerged from a December 2009, Chapter 11 bankruptcy proceeding sparked by the lethal combination of debt and plunging ad revenues with principally the same management team headed by CEO Farid Suleman, but ownership comprised of lenders including J.P. Morgan Chase & Co.

The Citadel-Cumulus radio conglomerate is poised to challenge radio Goliath Clear Channel Communications, Inc., which boasts more than 800 radio stations in the U.S.